By JAMES FINK
jfink@bizjournals.com | 716-541-1611

Erie County Executive Chris Collins says that as he began work on the proposed 2011 budget, he was on the lookout for signs during the drive from his home to the office.

Turns out the signs were "for sale" and "sold" ones that dot front lawns around the region.

Collins thought he saw fewer "sold" signs. And the statistics proved him right.

"Real estate is not changing hands," he said.

Real estate deals play a significant role in his budgeting process. Erie County gets a slice of all real estate deals in the form of a transfer tax that it shares with the Niagara Frontier Transportation Authority. The transfer tax amounts to $9 per $1,000 on each deal, with Erie County getting $4 and the rest going to the NFTA.

As recently as 2008, Erie County received $12.5 million in transfer-tax revenues. In his 2011 budget, Collins is projecting $7.5 million, a drop of 41 percent in just three years.

"I could not in good conscious budget more," he said. "I'm looking at all the economic-development indicators, and I don't see any boom in real estate transfer taxes coming next year. It's just another example of us getting hammered in every way possible there is to be hammered."

Despite the rush of home buyers this spring who took advantage of the one-time-only federal tax credit, residential real estate sales remain soft. Through Aug. 31, local sales of single-family homes and condos were off 11 percent for the year, from 6,440 in 2009 to 5,726. That's according to statistics compiled by the Buffalo Niagara Association of Realtors.

In total volume, sales are off 11.5 percent. They fell from $849.7 million in 2009's first eight months to $751.99 million for the same period this year.

"I don't see where any municipality can bring in what it budgeted, based on those numbers," said John Leonardi, association CEO. "Given the current trajectory, everyone is going to have to go back to redo their budgets. The economy today is so different than what it was even six months ago, let alone one year ago."

Erie County budgeted for $9.25 million in transfer-tax revenues this year, but it won't hit those numbers, Collins said. Early projections show they'll be off about $2 million.

Conservative, across-the-board budgeting, however, means the county can make up that difference from other revenue sources and tighter controls on spending,

The NFTA used the same approach when it put together its 2010-11 budget, which began April 1. It estimated it would take in $7.24 million in transfer-tax revenues but the actual number was 3 percent less than what was budgeted for in 2009-10.

The projections come after NFTA officials get input from economists and real estate insiders, said spokesman Doug Hartmayer.

"We don't do this in a vacuum," he said. "Our numbers were based on the anticipation there would be a slow economy."

Thus far, it's not a pretty picture.

Hartmayer said the authority has taken in $2.69 million in transfer-tax revenues, roughly 23 percent below budget - a drop of $826,000.

"What's saving us is that Metro (bus and rail) fares are up," he said.

Revenues from those are running $367,000 ahead of budget for a 3 percent increase.

"Still, it remains a bit of a balancing act," he said. "We are watching our expenses closely and we are not spending money unless we absolutely have to."